In 2021, the impact of climate change became much more apparent, with the increased severity of catastrophic activity across Canada. In British Columbia, an extreme summer heatwave caused record-breaking temperatures, devastating wildfires, and heavy late-season rainfall led to multi-billion-dollar flooding across the province.
Aon recently released its ‘2021 Weather, Climate and Catastrophe Insight Report’ for Canada, which highlighted that there was a total of US$343 billion in economic losses last year due to weather and climate-related events, making 2021 the third costliest year on record.
Steve Bowen (pictured), managing director and head of catastrophe insight at Aon, mentioned that the activity in British Columbia was expected due to the increase in atmospheric temperatures, but there were still many lessons that were taken away from 2021.
“These events have exposed vulnerabilities within our infrastructure,” he said. “We’re seeing failures of bridges and dams which were meant to limit or protect from damage. Unfortunately, that led to catastrophic flooding in many communities.”
On the whole, Canada faced another year of very expensive losses, according to Bowen. The Canadian insurance industry also insured losses in excess of a billion dollars, which is causing leaders to shift towards a more proactive approach in 2022.
“We need to be doing better from a planning perspective, mitigation perspective and from a resilience perspective,” he explained.
Moving forward, the country must be diligently investing in strategies to build resilient homes to best prepare Canadians for the continued effects of climate change.
“We must also make sure that the structures that are currently in place are being looked at again, retrofitted, and upgraded to withstand the intensity of these events,” said Bowen.
Canadian insurers and brokers continue to deal with the aftermath of claims volume that occurred throughout 2021. To mitigate potential losses in the future, teamwork will be key.
“We’re at a point, not just in Canada, but internationally, where we’re seeing much more openness and collaboration between public and private sectors,” Bowen emphasised. “We’re working with governmental bodies to identify areas that are already identified as high risk, and areas where risk continues to grow.”
By assessing what needs to be done, collaborating with external resources, and spending money on initiatives that ensure investments are directly targeting areas to mitigate big losses, the effects of climate change will be less detrimental in 2023.
“Another key component is how we’re communicating risks to individual stakeholders,” Bowen added. “Residents in many cases are simply not aware of what the risks are at their location.
“Being able to blend both the investment and awareness pieces together is really important so everyone is aware of what needs to be done.”
Within his role at Aon, Bowen works with organizations to facilitate more discussions around where risk is growing and what can be done to manage them.
“We’re immersed in data every day and know where risks are evolving, but there’s knowledge gaps between those of us in the industry, the government, and the everyday person or client,” he noted. “Making sure everyone is aware of what could happen tomorrow is so important.”
The industry has started using new methods of communication such as social media to promote risk management tips in the event of an evacuation, but Bowen said it is imperative that regional and local governments are out in front of these messages.
“While social media certainly has its benefits, it can also be a massive hindrance as so much misinformation can be spread,” he said. “It’s critically important for provincial and local government officials to take the lead and have a strong presence so people know where to get official information on what needs to be done to prepare themselves.”
